Paramedics wheel a stretcher into the Riverside General Hospital in the Third Ward, Thursday, March 29, 2012, in Houston. In the 50 years since desegregation, the former Houston Negro Hospital which was renamed Riverside in 1961 has struggled to compete in Houston, a city filled with health care options. After remaking itself in the 1980s as a substance abuse center, it now mostly on Medicare and Medicaid dollars that pay for very segregated but lucrative patient population: the mentally ill. ( Michael Paulsen / Houston Chronicle )

Photo: Michael Paulsen

Paramedics wheel a stretcher into the Riverside General Hospital in...

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State and federal agents load boxes of documents Wednesday seized from the Cullinan Professional Building of Riverside General Hospital after its assistant administrator was arrested.

Photo: Johnny Hanson

State and federal agents load boxes of documents Wednesday seized...

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The assistant administrator of Riverside General Hospital was arrested Wednesday in connection with more than $100 million in mental health clinic claims filed to Medicare.

Photo: Johnny Hanson, Houston Chronicle

The assistant administrator of Riverside General Hospital was...

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Earnest Gibson has worked as administrator at Riverside General Hospital since 1971. The independent community hospital began as Houston Negro Hospital in the 1920's, is facing another financial crisis. Photographed Monday Sept. 27, 2004. Chronicle/Ben DeSoto

Photo: Ben DeSoto

Earnest Gibson has worked as administrator at Riverside General...

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Gibson and his son Earnest Gibson IV, 35, were charged with 13 counts.

Photo: Johnny Hanson, Houston Chronicle

Gibson and his son Earnest Gibson IV, 35, were charged with 13 counts.

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The assistant administrator of Riverside General Hospital was arrested Wednesday in connection with more than $100 million in mental health clinic claims filed to Medicare.

After 30 years as CEO of one of Houston's most historic hospitals, Earnest Gibson III, along with his son and five others, was arrested on Thursday - part a national Medicare fraud sweep involving $430 million in bogus billings and 91 health care providers in seven states.

If the allegations against the 68-year-old Gibson are true, that he and others at the hospital bilked the Medicare program of $158 million over a period of more than seven years, it could prove lethal for Riverside, once the primary hospital for the city's black population.

Gibson and his son Earnest Gibson IV, 35, were charged with 13 counts: conspiracy to commit health care fraud; conspiracy to defraud the United States and pay and receive health care kickbacks; one count of money laundering and ten counts of violating the anti-kickback statute.

They are among dozens of individuals who were arrested or surrendered Thursday as indictments were unsealed nationwide. The Gibsons are accused of teaming up with Riverside's previously indicted assistant administrator, Mohammad Khan, who pleaded guilty in the scheme in February.

Together, the indictment alleges, the three created a plan that paid up to $3,200 in cash to "patient recruiters." The recruiters, in turn, would pay Houston-area group-home owners to send patients to Riverside's satellite clinics offering "partial hospitalization programs" for the mentally ill.

Son blames employee

"In Texas alone, these indictments say these alleged defrauders, including doctors and nurses, submitted $258.3 million in fraudulent claims to Medicare," said U.S. Rep. Kevin Brady. The Woodlands Republican - along with Rep. Gene Green, D-Houston, and Harris County District Attorney Pat Lykos - contacted Medicare authorities three years ago about explosive fraud in Houston.

Gibson has been president and CEO of the hospital since 1982.

His son told the Chronicle in July that the hospital, which was the Houston Negro Hospital until 1961, was being penalized for one rogue employee: Khan.

"These are people who need help," the younger Gibson said. "The Medicare fraud team is fraud themselves. It's not like I'm doing what Dr. Khan was doing."

The older Gibson told the Chronicle earlier this year that $60 million had been paid to Riverside and its clinics by Medicare in the last five years.

According to the indictments, Medicare-eligible patients were supposedly lured to Riverside's programs with cigarettes, food and coupons redeemable in the hospital's on-site "Country Store." The items in the store, according to a price sheet, cost from $2 to $30 and included a variety of goods - from Kleenex and candy bars to radios and disposable cameras.

According to prosecutors, the clinics, including Devotions Care Solutions, run by the younger Gibson, filed claims using Riverside's Medicare provider number. The claims, the indictment stated, "were not medically necessary and, in some cases, not provided."

$46.2 million in dispute

Of the $158 million in phony claims filed between January 2005 and June 2012, Medicare paid $46.2 million to Riverside.

Three of the five recruiters: William Bullock III, Robert Ferguson and Regina Askew, were charged with all but the money laundering charge. A fourth recruiter, Leslie Clark, faces 11 charges involving kickbacks, and the fifth, Robert Crane, a driver for Riverside and a recruiter, was charged only with conspiracy to defraud via kickbacks. All but Clark were released on bond Thursday.

Jackson Lee intervenes

What happens to Riverside or its patients now is unclear.

On June 8, four months after Khan's arrest, the Centers for Medicare and Medicaid Services stopped all payments to Riverside.

"It appears that, in suspending the Medicare payments you in effect have jeopardized some of the most vulnerable patients whose access to Medicare is literally their lifeline," the congresswoman wrote in a letter.

Sometime in August, 70 percent of the payments to Riverside were restored. The agency did not respond to requests for comment Thursday.

"None of us condone the heinousness of widespread fraud in our medical care system," Jackson Lee said in a statement Thursday. "This historic hospital with many valuable programs should not be closed. And I hope the community will rally around those patients who come every day for help."